N.J. Chiropractors, Orthopedist And Alleged Runner Accused In Insurance Fraud Scheme

PATERSON, N.J. (CBSNewYork/AP) -- Four people, including a husband-and-wife pair of chiropractors, were charged in New Jersey Thursday with operating a scheme to refer patients to each other to maximize insurance payouts and then hiding the practice by submitting fraudulent claims.

Passaic County Prosecutor Camelia Valdes on Thursday announced the arrests of Dr. Kenneth Gross, 44 and wife Dr. Michelle Dubnoff, 45, both of Morganville, New Jersey; orthopedist Dr. James Morales, 45, of Toms River; and James Hill, 50, of Hasbrouck Heights.

Gross ran a practice at the Chiropractic Physicians Group in Passaic, and Dubnoff and Morales had practices located at Ocean Wellness Center and Shore Sports Medicine, respectively – both in Toms River.

They were alleged to have referred patients to each other and submitted billing records that hid the fact that their practices were connected financially or through family ties, in violation of state law.

Hill allegedly acted as a runner to refer patients to Gross, who paid him off the books, prosecutors said. He is charged with failing to pay state taxes on that income.

Gross and Morales face charges including health claims fraud, conspiracy and commercial bribery. Hill faces similar charges in addition to tax and money laundering charges. Dubnoff is charged with conspiracy. The health claims fraud and conspiracy charges have maximum prison sentences of 10 years upon conviction.

Gross' attorney, Jeffrey Simms, said all four defendants pleaded not guilty at an arraignment in municipal court Thursday. He said his client was a ``capable, competent, professional medical proprietor, and he did what he thought was appropriate.''

``I think he can substantiate all of his financial records,'' Simms said.

Morales couldn't be reached at his office Thursday, and Dubnoff didn't return a phone message left at her office. Her attorney, Henry Klingeman, declined to comment on the case. Hill's lawyer, Michael Koribanics, said in an email he's ``investigating the allegations, and that is all they are, against him.''

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